Ownership Structure of Business Entities - Explained
Who owns a Business Entity?
Written by Jason Gordon
Updated at September 24th, 2021
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Table of Contents
What is the ownership structure for a business entity?Discussion QuestionPractice QuestionAcademic ResearchWhat is the ownership structure for a business entity?
Ownership structure concerns the internal organization of a business entity and the rights and duties of the individuals holding a legal or equitable interest in that business. As owner of the business entity, it is important to understand how the ownership structure of a particular business entity is organized and what that means for the owners rights.
- Example: A shareholder, as owner of a corporation, has certain rights. These rights are distinct from those of members of a limited liability company. Further, within the corporation, a holder of preferred stock may have different rights than the holder of common stock.
Visit the following articles for more information on ownership structure:
- A Detailed Explanation of the Sole Proprietorship
- A Detailed Explanation of the General Partnership
- A Detailed Explanation of the Limited Liability Company
- A Detailed Explanation of the Corporation
- A Detailed Explanation of the Non-Profit Entity
Next Article: Control Within Business the Entity Back to: BUSINESS ENTITIES
Related Topics
- What are Business Entities?
- Holistic (Detailed) Overview of Setting Up a Business Entity
- What is a Closely-held vs Publicly-held Business?
- What are the main types of business entity?
- What are the primary characteristics of business entities?
- What is Creation of a business entity?
- What is Maintenance of a business entity?
- What is Continuity of a business entity?
- What is Control of a business entity?
- What is Personal liability of owners of a business entity?
- What is Compensation of business owners?
- What is Taxation of a business entity?
- What is Sales & Use tax?
- What are payroll and self-employment taxes?
- Joint Stock Company
- Parent Company
- Subsidiary Company
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Holding Company
- State-Owned Enterprise
- Mutual Company
- Conglomerate
Discussion Question
Why do you think different types of business entity allow for unique ownership structures? Why do you think ownership structure is so important for business owners?
Practice Question
Can you think of any situation where ownership of the business entity became an issue between the founders or co-owners of the businesses? What was the basis of the dispute and what was the outcome?
- A good example is the dispute over ownership interest in Facebook, Inc., by the Winklevoss brothers. The genesis of the dispute is that their interest in the business was not compensated when they left the business early in its existence.